Money power: Make finance your cup of tea in 8 easy steps

01 / 9

02 / 9

5. Budget 2016: Educate yourself! No financial planner can understand your goals better than you do! Advisors, financial planners, etc are only responsible for presenting various options to you. The decision to walk down those roads is entirely yours. So invest time and money in educating yourself to handle your own finances. Understand the taxes paid, analyze risk and return potential of various investments and make optimum utilization of credit. It’s all about knowing what works best for you and monitoring it regularly. Working on these few points is enough to give you a head start in managing your own money. So, when, and if, FM Arun Jaitley gives the common taxpayer a few breaks in Budget 2016, you will be ideally placed to take advantage of it from the word go. Budget 2016: Check out income tax cheat sheat, find out what you will gain if Arun Jaitley makes changes

03 / 9

#2 Plan to save Remember the piggy bank you had as a kid? Why do adults make a big deal out of savings then? It’s the same concept. Carve out a chunk of your income every month, which goes into a savings fund. Typically, a savings bank account. Now you can choose to improve your returns on this money by investing it in fixed deposits. Go a step further and explore systematic investment plan (SIP) options wherein money is invested every month in equity and/or debt products as per your preference. Mutual funds have also proven to be a good long term investment option in Indian markets. Simple enough for beginners to make more dough from their dough! (Courtesy: CreditVidya)

04 / 9

#3 Provision for major expenses Be responsible and have a vision for your life. Think about the major expenses you may have to incur in the next couple of years. You may also have a vision of your dream lifestyle and what would be required to support it. Start planning for it, now! It doesn’t matter of you start small. Every penny saved counts. You will be surprised to see how well you have managed major expenses like a child’s education or marriage without any additional pressure only because you cared to think about it in advance and planned to save. (Reuters)

05 / 9

#4 Protect your loved ones Just like we work for money, we need to make money for us. Money helps us support a certain lifestyle for ourselves and our loved ones. Not to forget children, parents or any other dependents in the family are our responsibility. So, how will things function if you won’t be around someday? Deep thought, but we have to think about it because it is the truth. We are all mortals. Enter insurance! Figure out how much amount would be required to fulfill the financial requirements of your family in your absence and pick an insurance plan. Insurance experts can help you with this. All you have to manage now is a monthly premium amount. Also, the sooner you get insured in life, the better. The premiums will be lower and the insurance amount higher. (Reuters)

06 / 9

#5 Have a retirement plan Time flies and so will months and years! Don’t let time surprise you one fine day. It’s never too early to start planning for your retirement funds. You can decide your retirement age and accordingly start making a provision. Focus on creating assets which will generate regular revenue over a period of time. For example, homes for rent or shop space for lease. Apart from that, you can also decide on a lump sum target amount which will fetch you good interest income and start contributing to that chunk. (Reuters)

07 / 9

#6 Crushing on credit Credit can help you sail smooth but if you go overboard it can toss you into rough seas and that’s serious trouble. Be very cautious when you choose to borrow money. It can be in the form of bank loans or credit cards, what one needs to remember is that it comes along with interest burden. Pick credit money only if you are sure that the repayment can be managed well and it is absolutely necessary to use borrowed money. Repayments and credit history have a direct impact on your CIBIL scores. And you definitely don’t want to mess around with that number. Lending decisions by organizations are based to a large extent on your CIBIL score. (Reuters)

08 / 9

#7 Do not invest and forget Managing money is not a onetime activity which can be ticked off a to-do list. It is a process. It is important that you review your investments periodically. Check on the return on investments and think about ways to multiply that. Don’t be afraid to move on to better investment options. Also, check on your insurance and see if you need to pick additional insurance. You need to invest your time in this activity but the financial returns will see phenomenal improvement over a period of time. (Reuters)

09 / 9

#8 Power your knowledge Simply put, knowledge is power. Invest time in reading about finance, speak to experts and learn from your own experiences. Managing your own money is empowering. You will feel in control of your life. That will enable you to be present in the moment and enjoy each day to the fullest. And if you haven’t started yet, now is the perfect time! (Reuters)